Economic production quantity model with imperfect-quality items, two-way imperfect inspection and sales return

Yoo, Seung Hun; Kim, Daesoo; Park, Myung-Sub

doi:10.1016/j.ijpe.2009.05.008

Cited by 144 publications

(48 citation statements)

References 33 publications

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“…Also, by following the same procedure as that of Yoo et al (2009), the cycle length can be obtained from the depletion time of all the serviceable items sold as per demand rate, i.e from Eq. (3.1) and (3.2)…”

Section: Fig 1 Flowchart Of the Processes Taking Placementioning

confidence: 99%

Strategic production modeling for defective items with imperfect inspection process, rework, and sales return under two-level trade credit

Khanna¹,

Kishore²,

Jaggi³

2017

10.5267/j.ijiec

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Quality decisions are one of the major decisions in inventory management. It affects customer's demand, loyalty and customer satisfaction and also inventory costs. Every manufacturing process is inherent to have some chance causes of variation which may lead to some defectives in the lot. So, in order to cater the customers with faultless products, an inspection process is inevitable, which may also be prone to errors. Thus for an operations manager, maintaining the quality of the lot and the screening process becomes a challenging task, when his objective is to determine the optimal order quantity for the inventory system. Besides these operational tasks, the goal is also to increase the customer base which eventually leads to higher profits. So, as a promotional tool, trade credit is being offered by both the retailer and supplier to their respective customers to encourage more frequent and higher volume purchases. Thus taking into account of these facts, a strategic production model is formulated here to study the combined effects of imperfect quality items, faulty inspection process, rework process, sales return under two level trade credit. The present study is a general framework for many articles and classical EPQ model. An analytical method is employed which jointly optimizes the retailer's credit period and order quantity, so as to maximize the expected total profit per unit time. To study the behavior and application of the model, a numerical example has been cited and a comprehensive sensitivity analysis has been performed. The model can be widely applicable in manufacturing industries like textile, footwear, plastics, electronics, furniture etc.

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Section: Fig 1 Flowchart Of the Processes Taking Placementioning

confidence: 99%

Strategic production modeling for defective items with imperfect inspection process, rework, and sales return under two-level trade credit

Khanna¹,

Kishore²,

Jaggi³

2017

10.5267/j.ijiec

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“…Duffuaa and Khan (2002) [3] studied an optimal repeat inspection plan with several classifications, and an item could be divided into good, rework or scrap by considering six kinds of inspection errors. Yoo et al (2009) [4] first consider the two inspection errors, a Type I error (classify a non-defective item to be defective) and a Type II error (classify a defective item to be non-defective). Hsu and Hsu (2013) [5] carried out a sensitivity analysis to investigate the economic impact of a Type I error and a Type II error.…”

Section: Introductionmentioning

confidence: 99%

The Optimal Order Size and the Maximum Shortage Level Decision under an Order Driven Model

Zhang¹,

Xu²

2015

Proceedings of the 2015 International Conference on Education, Management, Information and Medicine

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Abstract. This paper mainly studies the retailer how to decision his order size and the maximum shortage level to maximize his profits. To end this, we establish an order driven model which consists of a vender and a buyer. In this model, we consider the three reality factors simultaneously: inspection errors, imperfect quality, multiple screening and shortage backordering. Based on it, we derive the optimal order size and the maximum shortage level. We also obtain three useful managerial insights. First, when the backordering cost increases, the buyer should decrease the order size and the shortage level simultaneously. Second, when freight transportation cost increases, the buyer should also increase the order size and the shortage level simultaneously. Third, the cost of accepting a defective item and the cost of rejecting a non-defective item have no impact on order size and the shortage level. Finally, we conduct numerical studies to complement our analytic findings and gain more managerial insights.

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“…Maddah and Jaber (2008) corrected a flaw in the model of Salameh and Jaber (2000) by using the renewal reward theory. Yoo et al (2009) proposed a profit-maximizing EPQ model that incorporated both imperfect production quality and Type I and Type II inspection errors. Cárdenas-Barrón (2009) developed an EPQ inventory model with planned backorders for determining the economic production quantity and the size of backorders for a single product, which was made in a single-stage manufacturing process that generated imperfect quality products and required that all defective products be reworked in the same cycle.…”

Section: Introductionmentioning

confidence: 99%

A supplement to an EOQ model with imperfect quality items, inspection errors, shortage backordering, and sales return

Hsu¹,

Hsu²

2014

10.5267/j.ijiec

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Hsu and Hsu (2013a) established a closed-form solution for an EOQ model with imperfect quality items, inspection errors, shortage backordering, and sales returns, where the customers who return the defective items will receive full price refunds; i.e., the returned items are not replaced with good items. In this note, we extend Hsu and Hsu's (2013a) work to consider the case that returned items are replaced with good items. A closed-form solution is developed for the optimal order size and the maximum shortage level. Numerical examples are provided to show the differences in the optimal solutions when returned items are replaced, and when they are not.

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Economic production quantity model with imperfect-quality items, two-way imperfect inspection and sales return

Cited by 144 publications

References 33 publications

Strategic production modeling for defective items with imperfect inspection process, rework, and sales return under two-level trade credit

Strategic production modeling for defective items with imperfect inspection process, rework, and sales return under two-level trade credit

The Optimal Order Size and the Maximum Shortage Level Decision under an Order Driven Model

A supplement to an EOQ model with imperfect quality items, inspection errors, shortage backordering, and sales return

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